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Free Tools for Improving Online Security

Free Tools for Improving Online Security

Many small-business owners fall below what some people call the “security poverty line.” Bootstrapping entrepreneurs can be especially vulnerable to hackers because they don’t have the money or personnel to buy, install and maintain the fancy security products large companies take for granted.

On the hunt for easy pickings, hackers are attacking these security-poor businesses, typically with indiscriminate, automated assaults that could be stopped by basic security tools and computer hygiene. Seven in 10 of the cyber break-ins analyzed in Verizon’s 2012 Data Breach Investigations Report occurred at organizations with 100 employees or less.

The good news is that it can be surprisingly easy and inexpensive to mount a quality defense on a budget. We spoke with Grady Summers, a vice president at Mandiant Corp., an Alexandria, Va.-based information-security firm, and former chief information security officer at General Electric Co., to assemble a list of easy-to-use, free tools that any company — including those without a technology staff — can use to create a comprehensive security program to protect its network, computers and data.

While no security program is perfect, applying these free tools can defend against the most common attacks. “A small business with a part-time IT person could probably do this in a day,” Summers says.

Defend your network.
Most of the threats to company networks come over the Web, Summers says. He recommends using filtering software to block dangerous websites, including “phishing” sites designed to trick unwitting employees into falling for a scam or infect their computers with malware.

San Francisco-based OpenDNS offers a free, cloud-based Web filtering product that can protect a single PC or mobile device, or an entire network, from known phishing sites. OpenDNS’s paid services offer more security features and the ability to block porn and other sites companies may not want people to access while in the office.

To find any weak spots on your network, run a scan. Lumension Security of Scottsdale, Ariz., offers a free vulnerability scanner for checking networks of 25 or fewer computers. It can identify software vulnerabilities and misconfigurations that could put you at risk.

Also, scan your website for security vulnerabilities. Hackers often break into customer databases by striking company websites or hack sites to plant malware that will infect visitors. Qualys, a Redwood Shores, Calif., security company, offers FreeScan, a free tool for detecting security vulnerabilities in Web applications and finding malware infections and threats in websites. Users are limited to five free scans.

If you have a capable in-house technology staff, you also may want to consider using Security Onion, a compilation of free tools for intrusion detection and network monitoring.

Secure your computers.
Protecting computers on your network starts with firewalls and antivirus software. Free basic firewalls now come with Windows and Mac computers, so make sure they’re turned on. Antivirus protection will require a download.

Among the most popular free antivirus programs is one from AVG. Another is Microsoft’s free basic security product Microsoft Security Essentials. It’s made for consumers and businesses with 10 PCs or fewer. And firewall giant Check Point Software of Redwood City, Calif., has a free security suite that includes antivirus and a ZoneAlarm firewall that monitors traffic leaving your computer, as well as standard inbound traffic. In addition, U.K.-based Sophos offers free antivirus software for Macs.

Eliminate security vulnerabilities by applying the free fixes software makers regularly issue. To make that easy, use automatic update features for MicrosoftApple, Adobe and other products you use. Windows users can make sure all their programs are current by using the free tool FileHippo.

Protect your data.
Full disk encryption software can make company and customer data on your devices unreadable to unauthorized people. Free open-source software TrueCrypt is available for Windows, Mac and Linux machines and can be used to secure data on thumb drives and other storage devices. For Mac, Apple offers free full disk encryption dubbed FileVault2 to users with the Lion operating system.

If you have particularly sensitive information, Summers recommends creating a special encrypted area for that data with its own password. You can create this sort of encrypted “volume” with TrueCrypt and a similar Apple feature.

Also back up the data on your computers in case of loss, theft or damage. With Mozy, you can backup two gigs of data for free offsite and encrypted in Mozy’s data centers.

From Renting Bedrooms on Airbnb to $1.5 Million in Venture Capital: Lessons in Resourceful Startup Funding

From Renting Bedrooms on Airbnb to $1.5 Million in Venture Capital: Lessons in Resourceful Startup Funding

To understand what it means to bootstrap, consider Tracy DiNunzio. She didn’t have the money to launch a business, but she didn’t let that stop her.

The fashion entrepreneur behind online marketplace Tradesy went from putting her bedroom on short-stay service Airbnb to scavenge startup cash to securing a $1.5 million round of venture capital in a few short years.

In 2009, working from her kitchen table, DiNunzio launched a peer-to-peer ecommerce site where brides buy and sell their used wedding dresses. At the time, she was working data-entry jobs to raise money for the business, called RecycledBride. To come up with more cash, she also sold some of her paintings, clothes and car. “I was the only one living in L.A. without a car. I would take the bus to meetings, in second-hand Chanel jacket. I was very much in fake-it-until-you-make-it mode,” she says.

After watching the traffic to RecycledBride site top 500,000 clicks per month in two years, without paying to drive traffic to the site, DiNunzio knew she was on to something. But she needed money to be able to pay for updates to the site beyond what she could wrangle with her self-taught coding skills.

Desperate for cash, DiNunzio turned to Airbnb. The first person she rented to was a man who contacted her from the airport in Reykjavík from his mobile phone. The man who arrived on her doorstep 17 hours later ended up becoming her husband. They went on to rent out the second bedroom and couch to more than 100 people on Airbnb for $30,000 in startup cash.

“I was doing the hustle, scraping together the money, giving it to the developers as much as possible,” says DiNunzio, who before starting her business had been painting in Mexico. “Revenue was coming in and I would pay it right over to the developers. They would let me pay late. I still owe them a big debt of thanks for that.” Slowly, DiNunzio was able to add features to the site and it became profitable.

DiNunzio expanded the model to include women’s fashion outside of the wedding dress industry in 2011. For a nine percent commission on the selling price, Santa Monica-based Tradesy sends a seller a shipping package, processes the transaction and handles returns.

“I am either a real entrepreneur or I am crazy. I was finally making enough money to live and be OK, but I felt like it wasn’t enough,” says DiNunzio. “I wanted more. I saw how well the model was working in bridal and I knew we could take over the world with the fashion category. I got very serious about making it a company.”

But growth was limited by when and how much money DiNunzio could get her hands on. Her first investor was DailyCandy founder, Dany Levy, a stamp of approval that DiNunzio says was invaluable for her business. The next money to come into Tradesy was a $50,000 investment from the incubator program she participated in, Launchpad LA. With that money, she hired her first full-time employee in January 2012.

Most recently, Tradesy received her first round of venture capital. The $1.5 million investment came from top-tier venture capital firms including Rincon Venture Partners, Dave McClure’s 500 Startups and Double M Partners, among others. In exchange, investors received between 20 and 30 percent of the company’s equity, DiNunzio says, declining to be more specific.

The business has since taken off. It has 22 employees and more than 250,000 items are for sale on Tradesy. In June, DiNunzio expects to launch a mobile application which will allow buyers and sellers to message each other directly on their smartphones.

Bootstrapping requires resourcefulness. Later-stage fundraising is often about making the most out of the opportunities presented to you. Here is DiNunzio’s advice for entrepreneurs looking to raise money later in the game.

1. Get a heavy-hitter mentor on board early. In 2011, when DiNunzio started hunting for money, her wedding dress ecommerce model was already turning a profit. Through a friend of a friend, DiNunzio landed a meeting with Levy. “For me, she was like Madonna. Getting to sit down and meet with her, I wouldn’t be excited to meet Madonna, I was so excited to meet Dany Levy,” says DiNunzio.

Levy says that it was DiNunzio’s intuitive understanding of technology, marketing and business management which impressed her immediately. Also, DiNunzio has an infectious entrepreneurial spirit, Levy says. “She has boundless energy, a remarkable (and rare) roll-your-sleeves-up work ethic, a truly refreshing common sense and a no-BS approach to everything she does,” Levy writes in an email. “Tracy is not just another ‘fashion entrepreneur.’”

When DiNunzio met with Levy, Tradesy already had a profitable business with impressive web traffic and a proven business model. The $25,000 seed investment Levy made in Tradesy wasn’t as valuable as the vote of confidence, says DiNunzio. “That opened so many doors afterwards.” Levy has become, in addition to her first investor, a mentor.

2. Consider “startup bootcamp.” Especially if you don’t come from the startup world, consider joining an accelerator or incubator program. DiNunzio exchanged six percent of her company for funds and mentorship at Launchpad LA. “Having gone through it, even if they didn’t give me the $50,000, but they gave me the mentorship, the connections, the office space, and the other things that came with the program, I still would have done it all over again,” she says. “It was the best thing I could have done for the business.”

In three months at Launchpad, DiNunzio says she met at least 100 investors. Connections DiNunzio made in the incubator lead to her the investors who participated in her first round of venture capital in July 2012.

3. Have numbers to prove your success. In early rounds of fundraising, entrepreneurs who are outside the Silicon Valley typical startup entrepreneur mold may struggle, DiNunzio says. “There is a lot of natural, biological instinct for people to trust someone who looks like them,” she says. “And then there is pattern matching where we look around and we see that the biggest CEOS, so far in tech, are men.” But if you get to the point of having a proven business model with metrics, then you are no longer working against investor anxiety. “At those stages, I do believe it is a meritocracy,” she says. But in the seed stages, you may have to work harder, bootstrap longer and prove the doubters wrong.

The JOBS Act: What You Need To Know

The ink is still drying on a piece of legislation that President Obama signed today, and the new law is good news for entrepreneurs seeking capital. Here’s a rundown of what is in the law and why it matters to you and your business.

The JOBS (an acronym for Jumpstart Our Business Startups) Act is a compendium of six pieces of legislation that are all aimed at increasing the ability of small businesses to access capital and generate jobs. The following breakdown of the provisions is according to information provided by the White House and an analysis of the JOBS Act written by two corporate and capital markets attorneys, David M. Lynn and Anna T. Pinedo of Morrison & Foerster, a global law firm headquartered in San Francisco, Calif.

1. It’s now easier for you to take your company public. The Reopening American Capital Markets to Emerging Growth Companies Act provision adds a new category of stock issuer to the Securities and Exchange Commission laws. The category, among other qualifications, defines an “emerging growth company” as a business with total gross revenues of less than $1 billion in its most recent fiscal year. The law provides such businesses temporary relief from certain SEC regulations, making it easier and more feasible to go public.

When does this go into effect? This provision is effective immediately and, in fact, if you have filed for IPO since December 8, 2011, you are able to apply retroactively for status as an “emerging growth company.”

2. It will be easier for you to sell your stock to private investors. The Access to Capital for Job Creators Act removes a SEC regulatory ban that says businesses cannot use advertisements to attract investors to a non-public offering. It has been very burdensome from a practical standpoint for companies of all sizes to keep their communications about a private stock sale under wraps.

When does this go into effect? The SEC has 90 days from today to amend its rules that prohibit solicitation.

3. You will have a new way of raising money by selling a piece of your company to the “crowd.” The Entrepreneur Access to Credit Act allows business owners to sell equity in their company to anyone with the cash and the interest through crowdfunding. Previously, crowdfunding was predominantly restricted to artists and business owners accepting small donations in exchange for things like tote bags and CDs. Also, the provision says that you don’t have to be an accredited investor (i.e., a really rich person) to invest in a company.

When does this go into effect? The SEC has 270 days from today to come up with a new regulatory framework allowing businesses to sell company equity on crowdfunding platforms. If you are hoping to sell pieces of your company to investors, you will have to wait until after Thanksgiving.

Cred, Connections, Cash — The Workings of a Business Accelerator

Cred, Connections, Cash — The Workings of a Business Accelerator

Entrepreneurs tend to be stereotyped as headstrong individualists who think they know the best way to do everything. While confidence and determination may be necessary when launching a business, sometimes the most important thing an entrepreneur can do is to talk with others founders and get some advice from experienced CEOs. That’s where a business accelerator can come in.

A business accelerator is an intensive, immersion experience in which an entrepreneur moves into a shared office space with other new founders for a period of time to work under the tutelage of advisors and experts to grow their business rapidly. In exchange for the expert mentoring, exposure to investors and cash investment that entrepreneurs get from the accelerator, the entrepreneur gives a portion of his or her company’s equity to the partners of the program and for this reason is often called a “seed” or “venture” accelerator.

Accelerators are similar to business incubators, but the latter typically don’t take equity in the companies, according to the National Business Incubation Association in Athens, Ohio. Accelerator investors often offers between $18,000 and $25,000 in funding in exchange for between 4 percent and 8 percent of each company.

Giving away a piece of your company to accelerate growth can be a big decision. What can make this trade-off so attractive? To help answer that question, we spoke with several recent participants in the Entrepreneurs Roundtable Accelerator in New York City. Here are five of the program’s biggest benefits they described.

1. Networking. An accelerator can help you meet the kind of investors, advisors and other entrepreneurs who are interested in helping nurture startups. Consider Derek Webster, the CEO and founder of LocalBonus, a “shop local” credit-card rewards program. Webster had “big company” experience in the credit-card industry, but he didn’t know the players in the NYC startup scene before participating in the accelerator, which takes an 8 percent equity stake in each founder’s company.

At the end of the program’s three months, says Webster, “I had a massive number of those one-one-one meetings, so that now I could turn to any one of those people and ask for help.”

2. Decision-making practice. One common reason for failure as an entrepreneur is “death by indecision.” Being in the accelerator really forces you to make decisions, because you are always meeting with program directors, mentors and investors, says Jonathon Ende, founder and CEO of Bizodo, an online-document builder and management system. At 29, Ende is already on his 15th startup, so he knows a bit about the momentum of getting a company off the ground. “Every week you are checking in with someone. You want to make progress,” says Ende.

3. Founder camaraderie. Being around other founders all day every day is often comforting and educational. At the Entrepreneurs Roundtable Accelerator, the CEOs had weekly meetings together, as did the chief technology officers. “When you are a new startup, there are all sorts of challenges that you face that are relatively common,” Webster says and having an opportunity to talk through those problems was helpful.

For example, LocalBonus CTO Tim Saunders has 14 years’ experience as a developer and so when fellow company founders were hiring technology developers, Saunders helped them interview and choose the most qualified candidates. “The day we all moved in felt like the first day of high school,” says Webster. But “very quickly we realized there was more to be gained by helping each other out than anything else.”

4. Testing assumptions. “It is very easy to drink your own Kool Aid, if you will. You believe you have the best idea and the way you have to do it is the best way,” says Ende. But when you are constantly being forced to explain yourself, you end up re-evaluating your business on a regular basis. “Being able to question the assumptions that you have made, what people want, what you are building,” says Ende, results in your business changing for the better.

5. Street cred. “The fact that you have already been through a filtering process” can give you — and your business — a leg up, says Webster. At ERA’s demo day, LocalBonus founders met investors they otherwise don’t think they would have had the opportunity to meet. Just to be in the program can be a mark of validation to the community of fellow entrepreneurs and investors.

Delay in Crowdfunding Rules Hurts Foreign Entrepreneurs (Opinion)

Delay in Crowdfunding Rules Hurts Foreign Entrepreneurs (Opinion)

Quang Mai Duy, the dynamic CEO of the Vietnamese start-up company Biaki, has a problem.

Despite Biaki’s initial progress in developing its CRM software solution for the Vietnamese market, Quang is having a hard time raising capital in Vietnam. Angel investing outside of the family is almost non-existent in Vietnam and there are relatively few venture capital funds in the market that would consider an investment in Biaki.

Contrast that with the U.S., where there has been a rise in the availability of early-stage capital for American entrepreneurs from angel investors, accelerators and crowdfunding sites. But unfortunately for international entrepreneurs such as Quang, this capital is not flowing from U.S. investors into emerging markets such as Vietnam that have plenty of room for growth.

Partly to blame is a delay in the Securities and Exchange Commission’s release of regulations to govern crowdfunding, which had been expected in 2012. In April last year, President Barack Obama signed into law the Jumpstart Our Business Startups (JOBS) Act, which is intended to greatly reduce the restrictions on equity crowdfunding for small businesses. But the SEC has yet to hammer out details, meaning even U.S. entrepreneurs who currently use crowdfunding portals (such as Kickstarter or IndieGogo) can only attract “investors” with products or token gifts rather than stakes in their business.

Biaki’s management team, including CEO Quang Mai Duy, second from right.

I met Quang and other Vietnamese entrepreneurs earlier this year while based in Hanoi as a Fulbright Scholar teaching entrepreneurship at the National Economics University. While in Hanoi, I was asked to serve as a mentor for the Founder Institute’s early-stage startup accelerator program in Vietnam. I helped lead the session for the participating entrepreneurs on raising investment capital alongside several Vietnamese venture capitalists. I was energized by the creativity and passion I found among Vietnamese entrepreneurs and empathized with the challenges they faced locally to raise capital

I became intrigued by the concept of Vietnamese entrepreneurs potentially accessing capital via crowdfunding from investors in the U.S. and elsewhere.

While it is true that investors typically prefer to deploy capital in companies that are in driving distance, I knew that there are a growing number of U.S. investors with an interest in investing in the growth and development of an emerging market such as Vietnam. I met several Vietnamese Americans who had success with technology companies in the U.S. and were starting the process of building networks back in Vietnam to support entrepreneurship such as Cali Tran, a venture capitalist at North Bridge Venture Partners, and Nam Do, CEO of Emotiv, both based in Silicon Valley.

One challenge to entrepreneurs like Quang is to get their presentation materials and investment pitch to the same level of their competition in the U.S. Perhaps the key to unlock the investment dollars will be partnering with American business-school students, like mine at Weatherhead School of Management at Case Western Reserve University, to work the kinks out of their presentations before they go live on a crowdfunding site.

Upon returning to the Weatherhead this fall, I decided to create a new seminar for students focused on trends in Asian venture capital. I assigned groups of students to work with five Vietnamese entrepreneurs who were graduates of the Founder Institute program to help them revise their pitches for eventual posting on a crowdfunding site. I also asked them to provide an assessment to these entrepreneurs whether crowdfunding was a viable option for them to raise capital outside of Vietnam.

Many first time entrepreneurs struggle to put together a first-rate pitch for investors. Trying to put together a successful pitch in a second language is even more of a challenge. The initial presentations that the Vietnamese entrepreneurs sent to my students were rife with spelling mistakes, confusing charts, and growth projections that lacked supporting evidence. My students spent time looking at pitches that had attracted capital on Indiegogo and Kickstarter and engaged with their Vietnamese entrepreneurs to provide them with advice to make their presentations more effective.

But ultimately, because of the SEC delays, none of my student teams could recommend that their Vietnamese entrepreneurs seek equity crowdfunding capital from U.S. investors at this stage. (Like their U.S. counterparts, the Vietnamese entrepreneurs could have used the portals to give away token gifts or simply for marketing purposes, but given the distance, it didn’t make sense.)

While recognizing the SEC has to deal with many issues including governance of the Dodd-Frank legislation, the delay in moving forward with crowdfunding regulations is causing entrepreneurs in the U.S. and abroad in markets like Vietnam to wait for what could prove to be an extremely promising source of financing.

Crowdfunding could be a lifeline for foreign entrepreneurs like Quang. Let’s hope there’s progress soon.

Google Hangout with SBA Chief Karen Mills

Google Hangout with SBA Chief Karen Mills

For small-business owners, pats on the back can be few and far between. Many of them would settle for a vigorous holiday season or perhaps an occasional day off or, better still, a vacation.

So it’s only fitting that we take a moment to highlight the creative, inventive and downright entertaining videos that won the Small Business Administration’s National Small Business Week video contest. In no particular order, the winners include KissTixx founders Dallas Robinson and Mike Buonomo, Brad Sterl of Pittsfield, N.H.’s Rustic Crust, Zalmi Duchman, the CEO of the Fresh Diet and Reggie Rodgers, the founder of Rodgers’ Banana Pudding Sauce.

Their two-minute video submissions were judged by top-level SBA representatives and were selected among more than 100 submissions. Each entrant was required to have received SBA assistance, and the winning submissions were chosen based on criteria including creativity, inspiration and video quality.

The four winners headlined a Google+ Hangout session with the SBA Chief Karen Mills and me. They also get lifetime bragging rights of course.

Steve Case on Fixing the Visa System (Opinion)

Steve Case on Fixing the Visa System (Opinion)

Last month, while having breakfast with a group of entrepreneurs in Chapel Hill, N.C., I met Deepak — a young, up-and-coming star in the Research Triangle’s entrepreneurial ecosystem.

Deepak hopes to grow his health-care startup, create good-paying jobs and enable people from around the world to live longer, healthier lives by personalizing the delivery of medical advice. Except for one challenge: The visa system of the U.S.

Deepak was born in India. Despite holding a Ph.D. in genetics from the University of North Carolina and watching his company increase revenue by 40% month-over-month, Deepak’s green-card status remains uncertain. As a result, he told me, Deepak is having a difficult time convincing investors to fund his expansion — thus with capital on the sideline, seven workers in Raleigh have not been hired and an innovative idea has not yet scaled.

As the election season enters its final phase, President Obama and Governor Romney have legitimate disagreements over which policies will most effectively jumpstart America’s economic recovery. But not when it comes to winning the global battle for the world’s most talented immigrants like Deepak. Both the President and Governor Romney support stapling green cards to America-educated immigrants who have advanced diplomas in science, technology, engineering, and math (STEM). Both the Democratic and Republican party platforms call for this type of visa reform as well.

The bipartisan support makes sense when you consider that the U.S. once prided itself on attracting and keeping the most highly-skilled immigrants from around the world. Iconic American companies like IBM, AT&T and Goldman Sachs were founded or co-founded by immigrants. So, too, were Google, Intel and eBay. In Silicon Valley between 1995 and 2005, half of startups had an immigrant founder. In 2005 alone, American companies with immigrant founders in the technology and engineering industries did $52 billion in sales.

For our economy, high-skilled immigrants are net-creators of jobs and net-drivers of innovation.

Today, arbitrary visa caps force 20,000 American-educated degree holders to leave our shores every year and contribute to the economies of competitor nations like China, Canada, South Korea and Singapore. We are subsidizing the entrepreneurial ecosystems of those countries every time we make it harder for people like Deepak to stay here and innovate. In fact, the percentage of immigrant-founded startups in Silicon Valley has fallen to 43.9 percent from 52.4 percent in the last seven years. Imagine if our national defense strategy were carried out in the same manner as our economic policy? Men and women would be trained and equipped with world-class battlefield skills at the Naval Academy, Air Force Academy and West Point before our government sent them off to fight for the militaries of other nations.

These challenges are not news to the ambitious entrepreneurs I’ve met recently in Raleigh, Denver, New York, Detroit, Chicago, Las Vegas and beyond who are working day in and day out to build solid companies. They understand that it’s harder to raise capital when a co-founder’s immigration status is pending or when they lack the flexibility to hire that talented engineer due to a visa issue. These folks don’t have the time or ability to sit down with policymakers and explain why our immigration system is slowing their business. All that they ask for is that some in Washington, D.C., are listening.

Indeed, some are listening these days — on both sides of the aisle. As a member of President Obama’s Jobs and Competitiveness Council, I’ve had the privilege of co-leading the effort to improve the environment for entrepreneurship in the U.S. While 2012 has been a politically charged election year, there has been legislative progress, including the bipartisan JOBS act which was signed into law in April. The bill permits crowdfunding so that startups have expanded access to capital and makes it easier for fast-growing businesses to go public.

When it comes to reforming America’s high-skilled immigration system, Democrats and Republicans are starting to show collective urgency. The bipartisan Startup Act 2.0 introduced earlier this year would eliminate the per-country cap for employment-based visas; create a new STEM visa category that puts graduate-degree holders on a path for a green card; and create an entrepreneur’s visa for legal immigrants who start a business. And last month, four bills were introduced — two by Democrats and two by Republicans — which would award green cards to the top foreign-born STEM graduates of U.S. schools. This is a positive sign for entrepreneurs.

The history of America’s ascension is the history of entrepreneurs churning out new products and services that change the world. In the last three decades, about 40 million American jobs were created by startups, all the net-new jobs our economy produced during that period. With consensus building that we need to fix our high-skilled immigration system to strengthen our competitiveness, it’s time for our elected leaders to do what our entrepreneurs do best: Figure out a way to get it done.

Push for Entrepreneur Immigration Reform Grows on Capitol Hill

Push for Entrepreneur Immigration Reform Grows on Capitol Hill

As the drumbeat for immigration reform grows louder, several bipartisan groups of Senators are putting their weight behind individual components of the reform that explicitly benefit entrepreneurs.

Wednesday, Senators Mark Udall (D, Colo.) and Jeff Flake (R, Ariz.) said that they plan to reintroduce the Startup Visa Act. The Act, which was first introduced by Sen. John Kerry (D, Mass.) in 2010 and then reintroduced by a bipartisan group in 2011, gives foreign-born entrepreneurs who either gain financing from U.S. investors or earn revenue from U.S. customers a visa to launch and grow their business. If those entrepreneurs create jobs for U.S. employees, they would have the option to stay in the U.S. permanently.

On Tuesday, another group of bipartisan Senators put forth the Immigration Innovation Act of 2013, which increases the ability of highly-educated and trained immigrants to stay in the U.S. The bill was introduced by U.S. Senators Marco Rubio (R, Fla.), Orrin Hatch (R, Utah), Amy Klobuchar (D, Minn.), and Chris Coons (D, Del.) and proposes increasing the cap on H-1B visas, those made available to highly-skilled professionals, to 115,000 from 65,000. Also, the legislation would create a sliding scale of the number of H-1B visas made available depending on demand.

Rubio, favored to be a Presidential candidate in 2016, has taken some heat from conservatives for getting behind immigration reform, a political hot-button issue. In an article Rubio penned for the conservative political blog Red State, he laid out the economic necessity of encouraging highly-skilled immigrants to stay in the U.S. While the U.S. technology industry creates 120,000 computer engineering jobs per year, the U.S. higher education system only graduates about 40,000 students per year, he says. To fill the talent gap, the young Republican party leader says more visas and green cards are necessary.

The Immigration Innovation Act of 2013 would also exempt graduates of science, technology, engineering and math (STEM) Ph.D. and master’s degrees from the green-card cap to encourage more of the foreign-born students who study in the U.S. to remain in the U.S. “Persons with extraordinary ability” and “outstanding professors and researchers” would also be exempt from the green-card cap. And among other proposals, the Immigration Innovation Act would reform the fee structure for H-1B visas and employment-based green cards and create a grant program for promoting STEM grads.

The flurry of bipartisan support for entrepreneur immigration issues comes in the same week when a group of eight Senators released a legislative framework for comprehensive reform and the White House released its blueprint for comprehensive reform. Despite the bipartisan support for both the Startup Visa Act and the Immigration Innovation Act of 2013, the President and his administration have made it clear that they are not interested in a piecemeal effort toward immigration reform.

Entrepreneurs Could Benefit from New Research and Development Tax Credit

Entrepreneurs Could Benefit from New Research and Development Tax Credit

Entrepreneurs could benefit from a new research and development tax credit that has been proposed by bipartisan lawmakers in Congress. If it passes, the tax credit would bring serious savings to startups that spend money on innovation before they have turned a profit.

Dubbed the Startup Innovation Credit Act of 2013, the bill would allow qualifying companies to claim the Research and Development Tax Credit against their employment taxes. Typically, a business deducts its research and development expenses from its taxable profits, which means the current R&D tax credit is useless for any startup that has not yet started making a profit. Under the proposed bill, if a startup is not yet making profit, it will still be able to reap a reward for investing in innovation by deducting its R&D spending from its employment spending.

To qualify for the tax credit, a startup must be fewer than 5 years old and have less than $5 million in total revenues. The startup would be able to deduct the total amount it spent on R&D up to $250,000 frm its employment taxes the following year.

Representatives Jim Gerlach (R, Pa.) and Ron Kind (D, Wi.) are expected to introduce the bill in the House of Representatives later this week that would mirror the Senate’s version, according to a release from Senator Chris Coons’ (D, Del.) office. Gerlach’s office said it was still working with the House Committee on Ways and Means to determine a specific date for introducing its version of the bill. The Senate introduced its version last Thursday.

In the Senate, Coons and Mike Enzi (R, Wyo.) teamed up with Senators Chuck Schumer (D, N.Y.), Marco Rubio (R, Fla.), Roy Blunt (R, Mo.), Debbie Stabenow (D, Mich.), and Jerry Moran (R, Kan.) in re-introducing the bill which was initially brought to the Senate floor in the summer of 2012.

Steve Case on Fixing the Visa System (Opinion)

Steve Case on Fixing the Visa System (Opinion)

Last month, while having breakfast with a group of entrepreneurs in Chapel Hill, N.C., I met Deepak — a young, up-and-coming star in the Research Triangle’s entrepreneurial ecosystem.

Deepak hopes to grow his health-care startup, create good-paying jobs and enable people from around the world to live longer, healthier lives by personalizing the delivery of medical advice. Except for one challenge: The visa system of the U.S.

Deepak was born in India. Despite holding a Ph.D. in genetics from the University of North Carolina and watching his company increase revenue by 40% month-over-month, Deepak’s green-card status remains uncertain. As a result, he told me, Deepak is having a difficult time convincing investors to fund his expansion — thus with capital on the sideline, seven workers in Raleigh have not been hired and an innovative idea has not yet scaled.

As the election season enters its final phase, President Obama and Governor Romney have legitimate disagreements over which policies will most effectively jumpstart America’s economic recovery. But not when it comes to winning the global battle for the world’s most talented immigrants like Deepak. Both the President and Governor Romney support stapling green cards to America-educated immigrants who have advanced diplomas in science, technology, engineering, and math (STEM). Both the Democratic and Republican party platforms call for this type of visa reform as well.

The bipartisan support makes sense when you consider that the U.S. once prided itself on attracting and keeping the most highly-skilled immigrants from around the world. Iconic American companies like IBM, AT&T and Goldman Sachs were founded or co-founded by immigrants. So, too, were Google, Intel and eBay. In Silicon Valley between 1995 and 2005, half of startups had an immigrant founder. In 2005 alone, American companies with immigrant founders in the technology and engineering industries did $52 billion in sales.

For our economy, high-skilled immigrants are net-creators of jobs and net-drivers of innovation.

Today, arbitrary visa caps force 20,000 American-educated degree holders to leave our shores every year and contribute to the economies of competitor nations like China, Canada, South Korea and Singapore. We are subsidizing the entrepreneurial ecosystems of those countries every time we make it harder for people like Deepak to stay here and innovate. In fact, the percentage of immigrant-founded startups in Silicon Valley has fallen to 43.9 percent from 52.4 percent in the last seven years. Imagine if our national defense strategy were carried out in the same manner as our economic policy? Men and women would be trained and equipped with world-class battlefield skills at the Naval Academy, Air Force Academy and West Point before our government sent them off to fight for the militaries of other nations.

These challenges are not news to the ambitious entrepreneurs I’ve met recently in Raleigh, Denver, New York, Detroit, Chicago, Las Vegas and beyond who are working day in and day out to build solid companies. They understand that it’s harder to raise capital when a co-founder’s immigration status is pending or when they lack the flexibility to hire that talented engineer due to a visa issue. These folks don’t have the time or ability to sit down with policymakers and explain why our immigration system is slowing their business. All that they ask for is that some in Washington, D.C., are listening.

Indeed, some are listening these days — on both sides of the aisle. As a member of President Obama’s Jobs and Competitiveness Council, I’ve had the privilege of co-leading the effort to improve the environment for entrepreneurship in the U.S. While 2012 has been a politically charged election year, there has been legislative progress, including the bipartisan JOBS act which was signed into law in April. The bill permits crowdfunding so that startups have expanded access to capital and makes it easier for fast-growing businesses to go public.

When it comes to reforming America’s high-skilled immigration system, Democrats and Republicans are starting to show collective urgency. The bipartisan Startup Act 2.0 introduced earlier this year would eliminate the per-country cap for employment-based visas; create a new STEM visa category that puts graduate-degree holders on a path for a green card; and create an entrepreneur’s visa for legal immigrants who start a business. And last month, four bills were introduced — two by Democrats and two by Republicans — which would award green cards to the top foreign-born STEM graduates of U.S. schools. This is a positive sign for entrepreneurs.

The history of America’s ascension is the history of entrepreneurs churning out new products and services that change the world. In the last three decades, about 40 million American jobs were created by startups, all the net-new jobs our economy produced during that period. With consensus building that we need to fix our high-skilled immigration system to strengthen our competitiveness, it’s time for our elected leaders to do what our entrepreneurs do best: Figure out a way to get it done.

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